As the government prepares next-generation reforms for the GST, the Gujarat Chamber of Commerce and Industry (GCCI) has written to Finance Minister Nirmala Sitharaman, pressing for simplification of the GST framework and the publication of industry-specific guidance notes to ease compliance.
The Chairman of GCCI's Indirect Tax Committee highlighted that reducing GST slabs, correcting inverted duty structures, lowering tax rates on essentials such as packaged food, electronics, and insurance, resolving classification disputes, eliminating compensation cess, and upgrading GST technology would make compliance more transparent while boosting tax collections.
Currently, India's GST system operates on multiple tax slabs, with the 18% slab accounting for nearly 70-75% of collections. In comparison, the 12% slab contributes just 5-6% but adds to classification disputes and compliance complexities. GCCI suggested merging the 12% slab into either the 5% or 18% category to streamline the tax structure, reduce litigation, ease input tax credit (ITC) mismatches, and simplify pricing for businesses.
The Chamber also flagged sectoral challenges in GST interpretation, particularly concerning leasehold land, intermediary services, and healthcare exemptions. It reminded that in the 14th GST Council meeting, the government had approved the formation of sectoral groups across 18 industries, including textiles, MSMEs, food processing, handicrafts, e-commerce and pharmaceuticals. These groups were tasked with identifying industry-specific issues and drafting detailed guidance notes in regional languages covering legal provisions, valuation, ITC eligibility, place of supply and sectoral exemptions.
"Publishing these guidance notes has now become essential to reduce interpretational challenges, minimise litigation, and ensure clear, consistent compliance practices across industries," GCCI stated.
With the government expected to bring forward a new wave of GST reforms, industry stakeholders believe that simplification, sectoral clarity, and technological improvements will play a key role in strengthening India's indirect tax framework.
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